As August approaches, the great Texas electricity debate intensifies

Texas Tribune :
July 21, 2012
: Updated: July 20, 2012 8:29pm

This is the South Texas Project (STP) nuclear plant near Bay City, Texas. Plans to expand the plant are on the drawing board. The plant is on a 12, 200 acre site. JOHN DAVENPORT/jdavenport@express-news.net

It is almost August. That means Texans are avoiding the heat, air conditioners are cranking and electrical power demand is going through the roof.

Hopefully, the power will stay on.

Texas likes to be No. 1 at everything. But we are currently dead last when it comes to the reliability of our electrical system, according to a recent assessment by the North American Electric Reliability Corp., a group that keeps tabs on the country's power situation, with the exception of Alaska and Hawaii.

That means that California — yes, California — is less likely to experience systemwide blackouts this summer than Texas. That even takes into account the ongoing problems at a major nuclear plant south of Los Angeles.

“I've been doing assessments for five years, and I have not seen this situation” on the Texas grid, said John Noura, the associate director of reliability assessments at NERC.

Grid officials do not expect blackouts this summer, but the problem is not going away soon because Texas is growing. Peak demand on the state's electricity grid (which covers most of the state except El Paso and parts of the Panhandle and East Texas) is rising faster than elsewhere, according to NERC. And power companies have been reluctant to build plants because low wholesale electricity prices, caused by the abundance of natural gas extracted with hydraulic fracturing technology, are eating into their profitability. (One exception is a natural gas plant planned for Temple that was announced this week.)

Other systems could resolve a power crunch fairly easily, by importing power from other states. That's what California does. But Texas, alone among the lower 48 states, has its own electric grid. That's an outgrowth of the state's keep-the-federal-government-out attitude — no interstate commerce jurisdiction here, please — and it necessitates self-reliance, for better or worse.

So Texas basically has two choices: Deal with higher power prices and try to mitigate them with conservation, or risk facing occasional, controlled blackouts, such as the one last year in the dead of winter — except that in the future, the blackouts would be more likely to come on the hottest summer afternoons.

Regulators are working on the problem. On Friday, the Public Utility Commission, which oversees the Texas electric grid, will hold a much anticipated workshop on electrical reliability. Representatives for power generation companies, consumers and everyone in between will crowd into an air-conditioned meeting room in Austin's William B. Travis Building to debate the merits of wonky changes to the way the electricity system works.

San Antonio's city-owned utility, CPS Energy, likely will send a representative to the PUC's workshop, spokeswoman Lisa Lewis said Friday.

CPS isn't short of generation. It added to its fleet when it purchased a natural-gas-fired plant in April. But if power demand should spike this summer, the city still could be vulnerable to rolling blackouts. That's because in emergency situations when there isn't enough electricity to meet demand, the operator of the grid orders utilities, including CPS, to curtail power generation.

One thing that's already happening is that power prices are going up. Last month, the commissioners voted to raise a cap on wholesale power prices by 50 percent starting in August, and they could decide later this year to double it.

CPS supported the hike in the wholesale cap to $4,500 per megawatt hour as a means of encouraging investment in new power plants, but the utility hasn't taken a stance on another increase, Lewis said.

“But in general, anything that would incent others to build (generation) would be good,” she said.

Regulators also are working on other solutions. One involves persuading Texans to use less energy.

In August, the utility commission will launch a campaign dubbed “Power to Save,” pointing out ways Texans can save electricity (and money), such as turning up thermostats a bit in the summer. The electric-grid operator also launched a free app in June to provide alerts when the grid is experiencing difficulties.

Another factor could help in the near term: the weather. Victor Murphy, a scientist in Fort Worth with the National Weather Service, said that although August probably would be hotter than normal, it shouldn't be as extreme as a year ago. In other words, a prolonged stretch of 100-degree-plus temperatures is unlikely.

That's probably the best news power-grid operators have gotten in a while.

Express-News Business Writer Vicki Vaughan contributed to this report.